Question 1

What Should My MER Goal Be & Why?

Accepted Answer

Can You Remind Me What MER Is?

It’s essentially a business’ overall ROI from its media spend. (Media spend is usually synonymous with ad spend in the world of small eCommerce businesses, unless you print flyers or have other promotional expense that will scale as the business scales).

It stands for “Media Efficiency Ratio” and it divides the business’ total, gross revenue by its total media costs.

What Should My MER Goal Be?

The simple, two-step answer is this:

Step 1:

How many times does your profit margin go into 100? That’s your break-even MER.

By the way, we're using this calculation for profit margin = (Net revenue - Costs) / Net Revenue

Costs should include anything that will scale with each additional sale (i.e. COGs, fulfillment costs, & taxes)

Step 2:

Want to make more than just break-even so you can pay your bills? Tack on an extra 10%-30% and that’s your MER goal!

But Why?

The best way to understand why is with an example.

Let’s say an eComm business has an average profit margin of 30%. This means one third of the revenue is kept while two thirds of the revenue goes towards paying for COGs & fulfillment.

So, step 1:

Thirty goes into one hundred 3.33 times. So the break-even MER for this business would be 333%. Meaning this business needs to make 3.33X more revenue than what is spent on ad spend in order to break even.

When this business spends $10 on ad spend and breaks even, it means they made $33.30 in revenue (which is a 3.33X return). But remember, this company’s profit margin averages 30%. That means they only get to keep 30% of the $33.30 they made, or $9.99.

They are breaking even at about $10 spent and $10 made.

Now, step 2:

Let’s say they want 20% more than that to cover their bills. Then they’d go for a 353% MER (a 3.53X return).

So when they spend $10 on ads and make $35.30 in revenue (which is a 3.53X return), they get to keep $10.59 (aka 30% of $35.30).

Now they’re breaking even plus making an additional 59 cents each time they bring in $35.30 in revenue, which they can use to cover overhead and salaries.

Why Don't I Want My Goal To Be Higher Than That?

The higher the return you want to make on each sale, the less of the market you'll be able to capture.

This happens because, if you want a higher return, then you need to spend less and make more. The problem with this is that Google Ads is an auction system, and the cost per click is pretty "set." Meaning, whatever your competitors can afford to pay for a click, is what you need to also be able to afford to pay for a click. But if you want a return that's significantly higher than what your competitors are going for, then you won't be able to pay for a click that costs as much as they can.

Sales funnels always have folks at the "bottom of the funnel" who have their wallet-in-hand, and folks at the "top of the funnel" who aren't ready to buy yet. And so the people who aren't ready to buy are going to be more expensive. They'll need to click on 2 or 3 ads before converting. Some of them won't ever convert, etc. There's also people who will have a lower average cart value than other people. So, if you tell the algorithm "I only want the ones who are cheap to acquire and who spend a lot of money with me" then you're cutting out part of your market.

This is why a high goal will limit your ad spend & stop the account from growing. You won't be able to scale sales & the business will stay small.

Shouldn't I Factor In Repeat Purchases (Returning Customers)?

If you have returning customers making repeat purchases, it makes it easier for you to hit your MER goal.

But it doesn’t change your MER goal.

Keep in mind: Those customers will come back after some amount of time, so the MER will go up when that happens. This makes the MER goal an easier target for a business only after it’s able to get those repeat purchases in.

The positive consequence of this is that you get to grow your ad account (increase budget) & grow your business (increase sales/revenue) more quickly (and, eventually, more vastly than your competitors can). Have a higher repeat purchase rate than your competitors? You win the game! You have more power to win in the bidding/auction system that is digital ads, because you can afford to pay more to acquire a new customer (higher CPC) since you’ll get more revenue later from each of them.

Question 2

Why Do You Bill According to Approved Advertising Budget, Not Ad Spend?

Accepted Answer

The “approved monthly ad spend” is a budget set by the Advertiser. Solutions 8 bills according to the approved budget regardless of the actual ad spend.

Let’s take a moment to explain this line in our PPC Agreement.

It sounds simple: set a budget, spend the money, increase traffic.

But the truth is, a whole lot of work goes into spending money effectively in Google Ads. In fact, Google often limits the amount of money you can spend on any given campaign. This means we have to do extra work to find new avenues for your ad spend in order to fulfill your budget.

So, let’s say we created three campaigns for your business and your approved budget is $10,000.

What happens if Google limits us to $2,000 on each campaign?

Well, with $4,000 left in the budget, we get to work.

The work behind the ad spend.

With money left over in the budget ($4,000 in this example), our team of strategists get to work to find new opportunities and pockets of traffic. What does this look like?

Conducting additional keyword research
Testing new bidding strategies
A/B testing new campaigns
Building different channels like YouTube and Display to expand outreach
Creating new ad copy

Traffic is inventory.

To visualize this spending challenge, let’s pretend that instead of asking us to purchase traffic for your site, you’re asking us to purchase apples—$10,000 worth of apples, to be exact.

We go to the nearest grocery store and purchase all the apples they have. But, we could only spend $6,000 (I know, that’s a lot of apples).

Now, we have to drive to every other grocery store nearby—maybe hours away or at tiny farmers markets—in order to spend the remaining $4,000.

Whether we hit our goal budget or not, the effort it took to drive around and find every apple possible was just as difficult (if not more difficult) as spending the full budget in one grocery trip.

To take this analogy another step further, this chase gets more difficult if the product is more obscure, like passion fruit or horned melon.

We’re not going to let your budget stay at an attempted threshold.

Overshooting your budget doesn’t benefit either of us.

If we have a difficult time meeting your requested ad budget in our first month together, we may give it another go—but we’ll never let your budget stay at a hard-to-match goal for long.

Basing our fees off the ad budget rather than spend holds us both accountable.

I’ll close with this:

Billing according to your ad budget enforces appropriate expectations by both parties. This keeps you from overspending and keeps us from depleting our resources chasing traffic inventory.

Additionally, there will be no surprises in your monthly billing; this keeps us from the meticulous nickel-and-diming that leads to management nightmares on both ends.

Watch our CEO, Kasim Aslam, explain this in more detail.

Have any other questions? We’re here to help!

Question 3

What Budget Do You Recommend I Start With?

Accepted Answer

There's no "right answer" to the question "what budget should I start with?" but here's what you need to know to make an educated decision.

Too High Can Be Bad

If you have a brand new ad account and/or a sales & marketing funnel that has not yet been thoroughly tested & honed, then exorbitant ad spend can put you at risk of overspending in areas that don't provide good results.

In the beginning, nothing has been tested just yet:

The algorithm doesn't know which combinations of ad copy, users, search terms, placements, etc. will work best
The ad management experts don't know which settings and campaigns and division of the budget will work best
The business owner doesn't know which parts of the website or call-to-action or lead magnets or emails will work best

If your budget is "too high" then it might outpace the manpower that's needed for iterations (i.e. marketing experts to edit the website, edit the sales pitch to match the new, cold leads from paid ads, fine-tune the settings in the ad account or the CRM email follow-up, catching & negating an irrelevant keyword, etc). It also might outpace the rate at which the algorithm can gather conversion data points to learn from (meaning the user interactions for the sales cycle to complete & the algorithm to observe what worked). It's impossible to know at what point this phenomenon will happen or even if it's happening, but this section is here to explain why we recommend starting with a somewhat conservative budget if it's a brand new ad account.

However, if you've run some ads recently (less than 30-90 days ago depending on how long your sales cycle is) then the algorithm has some data to work with, and if your website and other marketing assets have been tested & perfected then you are many steps ahead and can afford to be less conservative with your starting budget.

Too Low Can Be Bad

When a campaign doesn’t have enough ad budget to show the ad enough, it can have a compounding negative effect on campaigns.

More money = more opportunity for the algorithm to bid at the right time, the right place, and make sure to get the "easy" sale that it's been following for a while.

Here's a rough example: let's say a user interacts with one of your ads, and the algorithm sees them do it again a few days later... If it's out of budget that day, it might not have the opportunity to bid on that user's second search. A competitor's campaign that still has budget might scoop up this lead that was already invested in & "warmed up" by your ad a few days ago.

Budget limitations can also be detrimental to your return on ad spend, because the amount that you're able to spend per click will affect how far up on the page you’ll be. Higher up on the page means higher conversin rates since those users tend to be more eager to buy.

Another issue with low budgets is simply the lenght of time it takes to get through the "learning phase." Less money means fewer conversions and fewer conversions means fewer data points with which to optimize from. So, if it takes many months to get the hang of things, the business can run out of income in the meantime.

Then there's another compounding affect there, which is that more time exposes you to more shifts in the market. If the algorithm is watching a pocket of the market and trying to hone in on what works and then the weather changes...well, it's going to make it even more difficult & slower for the algorithm to decipher what worked well & when & why because you have that "market shift" factor pulling the rug out from it during the learning.

This is why we recommend raising the budget slowly & consistently in the first few months in order to find that perfect starting budget. Many times we discover a threshold where the return on ad spend begins to suddenly improves after a small budget bump.

Every Industry Has A Different Range Of "Ideal Min. Budgets"

What's your average CPA (Cost Per Aquisition)? If you sell consumer goods and your AOV (Average Order Value) is $60, then your CPA might be $20, for example. Whereas if you sell services and your LCV (Lifetime Customer Value) is $5,000, then your CPA might be $400, for example.

In one industry the algorithm only has to spend about $20 to get it's first conversion data point and in another industry the algorithm has to spend about $400 to get it's first conversion data point.

So, if both of these example companies start with a budget of $1000/month then the consumer good company will get about 50 conversions in the first 30 days and the services company will get 2 conversions in the same time period.

With only 2 conversion data points per month (and maybe only 1 in the first few months since it hasn't undergone any learning period yet), it's going to take the algorithm a long time to optimize itself towards what works (meaning which users convert, which search terms, which placements, which ad copy combinations, etc.)

So if your CPA is large, you will need to deal with larger ad budgets, even in the beginning, just to get things going fast enough before the business runs out of income.

Can You Give Me A Ballpark?

Sure.

If you have a brand new account & are working with low CPAs (like in the examples in the previous section), then we recommend choose a budget between $2000 - $5000 to start with depending on how patient you are to get through the learning/optimization phase & see results (lower budget means slower to learn/optimize but less money waste in the process and higher budget means quicker to learn/optimize but more money wasted in the process).

If you have a brand new account & are working with high CPAs (like in the examples in the previous section), then we recommend choose a budget between $5000 - $10000 to start with depending on how patient you are to get through the learning phase & see results (lower budget means slower to learn/optimize but less money waste in the process and higher budget means quicker to learn/optimize but more money wasted in the process).

If you have an account that has a good amount of recent conversion history, then we recommend starting with a budget that's the same (or a bit higher) than you were spending previously.

Whatever number you choose to begin with, we recommend raising the budget slowly & consistently in the first few months in order to find that perfect starting budget. Many times we discover a threshold where the return on ad spend suddenly improves after a small budget bump.

Question 4

How long will it take to see results?

Accepted Answer

Technically, you'll start to see results right away; however, it takes time for a campaign to "normalize" to the point of understanding how it will perform long term.

You're probably aware that we are very transparent about how long it takes to see results from your PPC campaign. Our goal is to provide you with realistic expectations, rather than selling you the moon. This is for the benefit of both agency and client to ensure both a highly effective and professional working relationship.

Important update to the "90-Day Rule of Thumb"

In the past, our rule of thumb was 90 days for a campaign to be fully optimized. This meant that after 90 days, we would typically have enough data to know whether or not the campaign would work long term.

With the introduction of Performance Max, the 90-day guideline no longer applies in most cases. Instead, it takes roughly 45 days just to see what we've built and how it's going to work.

Essentially, Day 46 is now Day 0.

This new campaign type is seven campaigns in one—Search, Shopping, YouTube, GSP, Discover, Display, Local, and Remarketing—and all of them are being optimized at the same time. Once Google has gathered and analyzed the available data, then we can start to see how the foundation we've put into place will perform over time.

Put simply, it takes time to successfully optimize a campaign and position it to scale. But more often than not, being patient during that initial learning period pays off in the long run.

How do we "Optimize" the campaign?

When you hear the term "optimization" that means that we are going to work towards generating more conversions for less cost per conversion. These results will be more frequent the more data that we collect.

We work off of a base 100-point data set when performing optimizations. What this means, is that when there are 100 points of data for an action, whether that be impressions, clicks, conversions, or simply the most appropriate data point for a particular campaign, we make a decision on what to do with that asset.

For example, if we see a group of keywords in an Ad Group that all have 100 impressions, we are going to look to see what has the highest Click Through Rate (CTR) and place more spend towards those higher-relevant keywords. Then, once each keyword generates 100 clicks, we are going to look to see which keyword resulted in the most amount of conversions, and place more spend in the keywords that have generated the most amount of conversions.

There are many more data points that are taken into consideration when talking about optimizations, but this will help you understand how optimizations work in the most basic form.

We also listen to every phone call that is generated from the campaign to ensure that when the phone rings, its a relevant person ready to talk to you on the other end. The results of these phone calls, directly affect the optimizations of your campaign, since we manually count those as conversions so we can identify which campaign is generating the most amount of relevant phone calls.

What You Can Expect In The First 90 Days

Within the first few days of the campaign launch, you will experience real results, however, it will not be the most optimized results. The conversions may be a bit more expensive in the beginning, or they may not be as frequent as you may like them to be, but rest assured, with each passing day, the campaign is going through changes to see those results increase. The first second month will be better than the first and the third month will be better than the second.

We will be reaching out to you very frequently and checking in on the quality of the conversions, plus giving you insight as to what optimizations have been made and what future optimizations we are planning to make in the near future.

Each month, you will receive a detailed report, extracted directly out of your AdWords campaign that we will review together. We review all data together so that you can offer your feedback regarding our strategies. There may be times where we rely on you as a subject matter expert and we truly value your input.

In Summary...

While there are very few campaigns that launch perfectly optimized, we do need time to assess where the conversions are coming from and make changes to the campaign to spend more ad spend in the Campaigns and Ad Groups that are performing well.

Our goal is to deliver to you a very high performing campaign within the first 90 days.

If you have any other comments, questions, or concerns, please feel free to click on the chat button in the bottom-right corner of this screen and reach out!

Question 5

Why is Google Ads reporting different numbers than Google Analytics?

Accepted Answer

Google Ads and Google Analytics handle the same data very differently. And for good reason: The two platforms have very different focuses.

Google Ads is focused on tracking 100% of the people who interacted with it and attributing those interactions to a sale.

Whereas Google Analytics, on the other hand, is simply a tool that has been developed to show you what's going on on your website...This means it's more focused on tracking where users came from immediately before converting.

Google Analytics doesn't care that the direct traffic will be high -- and that many of those conversions attributed to "direct traffic" could have interacted with Google Ads at some point on a previous session/day/week/month.

Google Ads does care about that. Because Google Ads wants to show you ALL of the conversions that it helped convert.

The reality is, before a customer converts, they usually go through multiple sessions first – they might click an ad, come back to your site the next day, and purchase on a different day.

Because of this, your conversion data can & will look differently depending on the platform you're using at the time.

Think of the platform like a lens for data interpretation: Google Analytics cares about sessions and Google Ads cares about ad interactions.

Google Ads and Google Analytics show different data because their purpose is different:

Google Ads is trying to show us which ads are profitable, when, why, etc.

Google Analytics, on the other hand, is trying to show us the most straightforward picture of what exactly happened on the site and when.

If you'd like to understand the technical details of how this works, read on...

The Two Platforms Use Different Technology To Keep Track

The two platforms have different levels of tracking capabilities to recognize the same user across different channels, devices, etc:

Google Analytics measures session data using browser cookies. This is all it needs, since it's only looking at data that happens within a single session.

Google Ads measures session data using browser cookies, too. But it also uses IP address, session ID, and even WiFi. It also can recognize Google users if people are logged in on their phone or their Chrome browser and connect the dots that way.

With that said, Google Analytics’ method of storing data can often cause about 15-25% decrease in conversion value compared to Google Ads. In other words, Google Analytics drops data.

The Two Platforms Attribute Conversion Data Differently

If a user clicked on an ad, didn’t buy, and then came back to the site directly the next day to purchase, Google Analytics will likely mark that person as “direct” traffic.

Even if the user clicked your ad, the credits would still go to “direct” traffic because it’s the last action the user took before converting. Why? Because Google Analytics uses the Last Click attribution as its default attribution model.

Depending on which settings your ad manager chose, Google Ads can use several different attribution models.

If a user clicked on an ad a month ago but only converted today, some or all of today's conversion will appear a month in the past – it all depends on the attribution model used.

As you can see, the two platforms almost always end up attributing conversions based on different rules (and attribution models).

Keep this in mind when using Google Analytics:

It is a tool that has been developed to show you what's going on on your website. It only sees where users came from immediately before converting, which means its direct traffic will be high since many people who interact with a paid ad will come back to the site directly when they're ready to convert.

If you’d like to explore this further, here is our chief account strategist, John Moran, on the subject:

Question 6

Should I be running video ads and what can I expect?

Accepted Answer

If you want to remind recent website visitors about your offer, running video ads will help. Some videos show on YouTube while others show on the Display network (meaning, your videos can appear on other sites.)

Video ads are best used with Remarketed Audiences––those who have already gone to your site and completed a conversion. People who watch your video aren’t necessarily searching for a solution at that moment. So, using video ads to remind the right audience (remarketed) about your offer can help increase their desire to buy.

What should my videos be like?

This varies wildly depending on the industry, the product/service, the target market, the business branding, etc.

Here are a few ideas to choose from. Our recommendation is to make as many as possible because it's tough to know what will be the most effective until you test it with your audience:

Customer/client testimonial videos
"How to" style videos that address common hesitations or questions prospects have
Business owner "mission statement" videos where the company founder introduces themselves & their "why"
Professional commercial-style videos showcasing a product/service or a category of products/services
Affiliate amateur-style videos where a partner figure recommends the product/service

Here is our helpful 1-minute script template that could come in handy if you plan on making a video soon.

Here are 5 video ad sequence ideas to provide ideas for different video ads:

Tease, Amplify, Echo (3 videos).
The Direct Shot (3 or more 6-second videos).
The Mini Series.
The Follow Up (2 videos).
The Lead-In (2 videos).

Pro Tips:

Since videos are often skippable, it’s critical that you mention your brand or company name and your offer within the first 6 seconds.
For a bigger impact (but not mandatory) show your company logo within those first 6 seconds, and place it anywhere except the bottom right.
Start with a question or shocking statement in the first 10 seconds.
Tell the viewer "what's in it for them" (make them the hero of the story).
Video length and aspect ratio aren't important.
Don't mention time-specific details. Keep the content evergreen, because Google has to re-optimize every time the video is replaced.
Make a handful of videos & let Google rotate between them to find the winner. Don't limit yourself to one video.
Google will create sequences from your videos automatically (i.e. it will show video A to a user and then video B to the same user if it finds that to be the order that gets the highest engagement)

How long should my videos be?

The most important thing is the first 5 seconds because most video ads are skip-able after that. Make sure to include a value statement in the first 5 seconds. As for the final length of the video, it doesn't matter too much!

Where should I host my videos?

Videos will need to be hosted on your YouTube channel.

How will video ads impact my conversions?

Videos are often not clicked on directly. Instead, leads will watch the ad a few times then search the brand on Google afterwards.

This makes conversion hard to track directly, but you should see a rise in the conversion rate of your Branded Campaign and View-Through Conversions report.

How do I keep my audience engaged?

It’s important to remember that if your video ad is not engaging right off the bat, you’ll lose a big percentage of your audience immediately. So if you want to build effective video ads, you need to grab your audience’s attention with a great hook.

4 Tips to getting your audience hooked and engaged:

1. Start from the climax. Drop your viewers in the middle of the action––the most exciting, dramatic, or interesting scene in the plot. When you start at the peak of the climax, you successfully catch their attention.

2. Make sure that the story is relevant to your audience–and specifically made for your avatar. Address your viewers’ wants and needs and make them feel like the story is about them.

3. Use imagery and language (e.g. script) that your viewers aren’t expecting. This helps in disrupting behavioral patterns, beliefs, and any preconceived notions about your story or offer.

4. Keep your viewers guessing. Add some element of surprise to keep the anticipation going. Only reveal enough information that will make your audience curious to find out more.

Question 7

How Long Google Ads' Learning Phase Takes

Accepted Answer

You launched your Google Ads campaign. You have a ROAS goal you want to achieve and a daily target budget to support it.

But after a few days (or weeks), you noticed that you’re not hitting your ROAS goal…

And worse, Google isn’t spending enough to reach your ad budget.

What’s happening?

One of the most common mistakes people make is setting a ROAS goal and expecting Google to reach it right away.

By doing that, they’re not only slowing themselves down from hitting their goals, they’re also preventing Google from spending their target budget.

And here’s why: Your campaign needs to undergo the “learning phase” first.

It’s that initial time period where Google gathers all the data you’ll need to successfully optimize your campaign and position it to scale.

In this post, you’ll learn about all the different factors that might affect your “learning phase” and how to deal with them so you can reach a point where your campaign looks profitable and scalable.

But first, let’s answer some of the most common questions asked and get them out of the way.

An important update to the "90-Day Rule of Thumb"

In the past, our rule of thumb was 90 days for a campaign to be fully optimized. This meant that after 90 days, we would typically have enough data to know whether or not the campaign would work long term.

With the introduction of Performance Max, the 90-day guideline no longer applies in most cases. Instead, it takes roughly 45 days just to see what we've built and how it's going to work.

Essentially, Day 46 is now Day 0.

This new campaign type is seven campaigns in one—Search, Shopping, YouTube, GSP, Discover, Display, Local, and Remarketing—and all of them are being optimized at the same time. Once Google has gathered and analyzed the available data, then we can start to see how the foundation we've put into place will perform over time.

Put simply, it takes time to successfully optimize a campaign and position it to scale. But more often than not, being patient during that initial learning period pays off in the long run.

How do we "optimize" the campaign?

Optimization means the “things we do to improve a campaign’s performance.” We do that with either one or both goals in mind:

To bring your cost per conversion (CPC) down
To increase your return on ad spend (ROAS)

To reach our goals, we stick to a proven process, go through the learning phase, and make optimizations. Here’s a just few of them:

These are just a few optimizations we do from the start. The conversions may cost a little more in the beginning, or may be inconsistent. But as your campaign goes through the learning phase, you’ll see results.

How long should we stay in the experimenting & learning phase with our Google Ads account?

The experimenting and learning will slow down a bit after the campaign is fully optimized, but it is important to never stop making changes to the campaign. With live bidding, you often won’t use automated bidding strategies because they won’t optimize performance.

For example, if you tell it to automatically focus on getting the maximum amount of conversions, then it will set the bids in order to get the most amount of conversions, which favors cheaper, poorer-quality traffic because it is not focused on the quality of those conversions.

You could potentially set a goal for the automation to target a specific cost per click, but you don’t have enough activity to use that feature because you would need to have a conversion or two every single day for it to have enough data to form patterns. So, use Manual CPC with enhanced CPC enabled, which means you set the bid based on what you think the keyword should be worth to you, how many clicks per day, and if there are conversions for that campaign.

You could probably not touch a campaign for a month and it would likely perform relatively systematically, but as new competition comes in, old competition falls out, people increase bids or increase their budget, you need to hop back in there and make those adjustments.

So, how do you get past the learning phase and more importantly, what are some of the factors that affect your campaign from moving quickly?

That’s exactly what you'll learn today.

1. State of the Ad Account

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/MpD6OKc9u8/resources/CDPbaOjSgr/Google%20Ads%20account%20historical%20data%20.png (Google Ads account historical data .png)

No or inaccurate historical conversion data

If you recently launched a brand new account, it won’t have any historical data. Google doesn’t know your target market and it doesn’t have a data-driven and well tested algorithm yet to find your ideal customers.

Unlike an older account that has at least 2-3 months of consecutive and recent historical data, a brand new account takes longer time in gathering enough data.

“But what if my account is about six months old?”

If it’s at least 6 months old but there’s no recent historical data in the past 2-3 months, the algorithm might have already changed, like:

target market
competitive landscape
price points

Which only means one thing—it’s outdated. Unfortunately, that’s worse than a brand new account with no historical data. Here’s why:

Let’s say you were running a campaign and your conversion was set to count “everyone who visits the product page.”

Whether the person who visited your site only viewed the product, added to cart, or bought the product, you counted it as a conversion. This gives you a false conversion value that actually hurts your data.

Instead of having real data, you now have to fix and refocus the algorithm first. And that can take longer than having no conversion data in the first place.

Not running sacrificial campaigns (inbound)

If you’ve been checking out our videos and blogs for awhile now, you probably already know how much we LOVE Smart Shopping.

The problem is while Smart Shopping is pretty darn powerful, it’s kind of a slow learner especially in the beginning.

That’s because it’s still gathering data to figure out what an interested lead or customer looks like.

So if you’re only using Smart Shopping, it’s going to take a very long time—you might as well take that vacation you kept cancelling while waiting for Smart Shopping to scale. (Hey, that’s not a bad idea! ;p)

The trick is to run it alongside other additional campaigns like branded, remarketing, competitor, display, or even YouTube. We call these sacrificial campaigns.

They might not directly bring in profits, but if you’re struggling to get enough traffic that will feed back into your Smart Shopping campaigns and bring more users to your site…

Sacrificial campaigns will help you do the job by monetizing Smart Shopping and feeding it data from other sources.

2. State of the Industry

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High CPC (high competition)

“More clicks equal more conversions,” they say. That’s true...until you run out of budget.

See, it’s not uncommon to see a high cost per click in a highly competitive industry. Hopefully, your average order value or your lifetime customer value will be able to balance your expenses.

However, if your clicks are too high and your margins are thin, you have to be very strategic. You might run out of budget faster than you know.

Low market demand

Another factor that can lower your learning phase’s speed is if your product is something new.

While Google’s multi-faceted ecosystem gets over 1.3 trillion global searches per year, it doesn’t mean you can instantly get tons of people searching for your product.

At least not in the beginning or if your product is something new.

Maybe it’s a niche product or a unique product that has yet to be discovered in the market––if people aren’t aware of it, they probably won’t search for it.

This is another reason why using a sacrificial campaign like YouTube is recommended. Not only does it help to increase your traffic, it also helps to increase your conversions – especially if you use remarketing.

3. State of the Business Itself

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/MpD6OKc9u8/resources/0vvmRxxsFn/Google%20Ads%20remarketing%20.png (Google Ads remarketing .png)

No remarketing audience (low website visitors)

Dynamic Remarketing shows ads to those who previously visited your website or engaged in your ads. Running Smart Shopping with remarketing makes your campaign unstoppable.

That said, if you’re running Smart Shopping without remarketing for a while, it won’t be as profitable because there’s not a lot of existing traffic to convert.

And if you have a small number of website visitors, then it's going to take a long time for the remarketing audience to pixel.

Low ad spend

Low ad spend can result in low conversions. So if you’re spending $1,000 a month, you’re going to get less traffic to the site than if you’re spending $2,000 – assuming your CPC stays the same, of course.

Low CTR (Untested or out of date website design)

Even if you’re using these 5 tips to increase your CTR, and you’re sending 200 people to your site every single day…

If your bounce rate is high and people aren’t converting, it’ll take longer for Google to get enough data to build profiles of your customers. Plus, you’re going to lose more money.

So make sure that you update your website’s design and split test it (if possible) to know which version works best.

4. State of the Products

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/MpD6OKc9u8/resources/KxcPsHVtPV/large%20quantity%20of%20products%20affect%20Google%20Ads%20conversions%20.png (large quantity of products affect Google Ads conversions .png)

Large quantity of products

The number of products you have can affect the time it takes for the algorithm to reach a point of certainty. Not only that, but the number of conversions for each product determines how reliable the data is.

For the data to be viable (and reliable), the algorithm has to find a pattern first. Think of it like a survey. If you asked the same question to a hundred people, and they all have different answers, then you can’t rely on that data to come up with a solid conclusion.

But if at least 20 of them have the same answer, then you’ll be able to see a pattern – either demographically or psychographically.

Do they all have the same jobs? Do they live in the same city? Do they have the same interests? And so on.

Once you see patterns, you can now create a profile. And based on that profile, all you have to do is tell Google “Hey, this type of person lives in this city, does this type of job, and is interested in these things. Get me more of them.”

Here’s what an account that has a large quantity of products (about 4,000) look like:

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/MpD6OKc9u8/resources/QDA5EfO6Jf/low%20ad%20budget%20with%20large%20quantity%20of%20products.png (low ad budget with large quantity of products.png)

As you can see in the image above, there are multiple products in the campaign. But each product only has one conversion. Even though some of them have a high ROAS, we still can’t rely on that.

The product you want to scale should have, say, at least 3 conversions to get an average going for it to be certain and avoid getting analysis paralysis.

One of the reasons why we’re only getting 1 conversion per product in this account is because the budget was divided and spread out to different products. That itself––having a low budget––limited our ability to effectively test each product.

If you have fewer products, like this account shown below, it would be a lot faster for the algorithm to see patterns.

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/MpD6OKc9u8/resources/CCeO7bLVVg/low%20ad%20budget%20with%20low%20quantity%20of%20products.png (low ad budget with low quantity of products (1).png)

But that doesn’t mean you can only sell a few products. The solution is to place your bets on a target ROAS goal and choose specific products first.

By choosing specific products and putting more budget to test them, you’ll get more conversions. Once there’s a conversion pattern, you’ll have enough data to scale that product.

That can help you get past the initial learning phase.

No GTINs

Let’s be clear. You don’t need GTINs (Global Trade Item Number) in order to scale. As long as Google approves your products, you can scale without having a GTIN.

However, you run the risk of losing all your optimized data without it. And you lose the ability to tap into the existing historical conversion data of your products.

Here’s what I mean.

Any product that’s been sold in the market with GTIN has valuable conversion data. If you’re selling the same product, you can use the same GTIN and...voila! You now have data in your products.

It’s like borrowing someone else’s flash drive and uploading their files on your computer instead of searching for files and doing the work yourself.

The problem is if you’re selling a unique item, you’ll probably need to create your own GTIN. Which means there’s no valuable conversion data yet – you have to create it.

That’s one of the reasons why having no GTINs can cause your learning phase to slow down.

New market creation (a new widget no one has heard of)

As mentioned earlier, if it’s a new invention (a product that’s unique), there might be no audience for it yet. You have to educate people about it first – usually done via a discovery campaign – before your product gets momentum.

5. Purchasing habits of the target customer

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/MpD6OKc9u8/resources/LxuhukGTcs/purchasing%20habits%20of%20your%20customer%20.png (purchasing habits of your customer .png)

Large conversion lag

A conversion lag means the time it takes between product discovery and product purchase. The larger your conversion lag is, the longer it takes for the algorithm to gather data. Ultimately, it affects your learning phase.

There are a few factors at play when it comes to conversion lags:

Price. The higher the price, the more time it usually takes for a person to purchase it.

Needs. The lower the demand or urgency is, the slower the purchase will be.

Decision maker. Even if your lead can afford the product and he needs it right now, if he needs someone else’s permission first, it will delay the purchase. Those decision makers can be the spouse, boss, or a group of people.

Low average cart value

If your average cart value is low, it’s going to be harder to achieve the ROAS you want. Unfortunately, this will impact how long your learning phase is going to last.

And that’s it! Remember, you have control over most of the factors that affect your learning phase. For those you can’t control, just stick to the process. Test as much and as often as you can. Have the patience to wait and go through the learning phase.

In the words of Leo Tolstoy, “The two most powerful warriors are patience and time.”

If all this sounds overwhelming and you need more help, we got you covered. We’ll review your existing accounts (if applicable) and provide a Google Ads Action Plan for FREE. Get your action plan here.

Question 8

How Our Billing Works

Accepted Answer

Whether you’ve worked with an agency before or it’s your first time, understanding your contract can be confusing—especially when it comes to the billing process.

Fortunately, our billing is simple and straightforward. And in this article, we’ll show you how it works, help alleviate any confusion, and set expectations so you can manage your budget and payment a whole lot easier.

Getting started: What fees do I pay in the first month?

For all new accounts, we configure all settings and complete the account build based on the data you provide us. This is called a “campaign creation.”

Upon the effective date of the paid advertising management agreement, we’ll send the first invoice containing the campaign creation fee. This initial fee is billed one-time and only in your first month.

So, if the date of agreement is on July 8th, expect to receive invoice #1 on the same day.

How long does it take to launch my campaign?

It usually takes 10-12 business days for campaigns to go live. This includes the client’s completion of the onboarding process and providing proper access to accounts.

Now, it’s important to note that any delay in the onboarding could cause the campaign to be launched after the second invoice was scheduled to go out. And we’ll talk more about this in a second.

But before that, let’s jump to the next topic.

What fees do I pay for month #2?

Once the campaign is created and all set up, it’s time to manage and optimize.

This means we’ll do all the account optimizations needed to improve the performance of your account, including:

Bid management
Negative keyword implementation
Keyword expansion
Ad copy testing

And other relevant optimizations according to your optimization schedule based on your account’s ad budget.

This process is called “campaign management.”

One month after the effective date of agreement is signed, we’ll send out your second invoice–the monthly management fee plus the agreed percentage of the approved ad budget.

Learn more about why we charge an ad budget fee and why we bill according to the approved ad budget.

Moving on, the campaign management fee (also called “monthly management fee) is sent one month after the effective date you signed the agreement, but only if your campaigns were launched within the same month.

Going back to our example, if you signed the agreement on July 8th, then you’ll get the second invoice (monthly management fee) on August 8th.

But what if the onboarding was delayed and your campaigns were launched after August 8th?

Then you won’t receive any invoice until the day your campaigns are launched.

Say your campaigns were launched on August 10th. You’ll receive the second invoice (monthly management fee) on September 10th–one month after your campaigns went live.

From then on, expect to receive the future recurring monthly management fees every 10th of the month.

To help you visualize the billing timeline, we’ve created this infographic.

https://malcolm-en-gb.s3.eu-west-1.amazonaws.com/instances/MpD6OKc9u8/resources/hST1Lhi9hT/Paste%20%282021-06-25%2011-33-59%29.png (Paste (2021-06-25 11-33-59).png)

Want to know what it looks like with specific dates? No problem!

Here's an example of what the timeline looks like with exact dates.

Campaign is launched on-schedule (within month #1)

July 8 - Effective date the agreement is signed. Invoice #1 (campaign creation fee) is sent.

July 20 - Campaign goes LIVE.

August 8 - Monthly management fee is billed. Invoice #2 is sent.

September 8 - Monthly management fee is billed. Invoice #3 is sent.

Campaign launch is delayed (after month #1)

July 8 - Effective date the agreement is signed. Invoice #1 (campaign creation fee) is sent.

August 10 - Campaign goes LIVE.

September 10 - Monthly management fee is billed. Invoice #2 is sent.

October 10 - Monthly management fee is billed. Invoice #3 is sent.

And there you have it. If you want to know more about what happens in the back end within the first month, check out our post about how we organize and execute our client management process.

Question 9

Why do you charge a 10% fee?

Accepted Answer

Nearly all of our costs are based on how much we spend (this includes click fraud prevention, vendors, and software and monitoring tools, such as Google Keyword Planner, iSpionage, SpyFu, and SEMrush).

So, we simply cannot scale profitably without a benchmark set against spend.

More to the point:

**The larger a campaign gets, the larger the workload to manage. **

As data-driven marketers, everything we do is based on data-driven optimization. Every dollar spent is a data point and every data point requires action.

The more you spend, the more work involved in managing and optimizing the campaign.

The benefit to both of us is you'll never choose to spend more without a high-performing campaign. So, the system ends up being meritocratic in construct.

And, because we charge a base, plus a small percentage (unlike many high-end agencies that simply charge a much larger percentage across the board), our campaigns become more profitable as a percentage as you grow.

As far as the agencies that don't charge a percentage fee…

They're actually showing their hand in doing so.

In fact, we would bet every single one of them is using automated bidding tools to attempt to manage your campaign through the use of "AI" — without the expenditure in human capital.

Still concerned about the fee? Let’s talk about it.

Question 10

Why is my profit margin becoming thinner as we scale?

Accepted Answer

When you increase ad spend, it's common to see an increase in your CPL or a decrease in your ROAS. Here's why.

Increasing our ad spend means we are targeting a larger audience. These are people who aren’t ready to buy––and it takes more clicks and longer time to convert them.

Simultaneously, we are competing with big players who have enough money to over-bid on keywords. This brings our CPC up.

The more we expand the audience size, the less certain Google’s algorithm will be when they show an ad. That’s because we’re pushing the algorithm to go into uncharted territory––it doesn’t know who to target yet.

If our low-hanging-fruits are composed of only a small portion of our audience, it’s hard for Google’s algorithm to determine who will go for the click.

So we need to warm up our audience and add “brand awareness” strategies until the top-of-the-funnel audience gains familiarity with our brand.

For example, we can run a display ad that targets a proactive (not remarketed) audience. This might not get many clicks but we’ll get views that can increase our brand awareness.

How do we spend more without diminishing profit margin (i.e. lowering ROAS or increasing CPL)?

It is nearly impossible to increase your budget without thinning your profit margin, at least for a short time.

To balance it, we recommend temporarily “leaning out” your account when trying to scale. This helps you preserve your profit margin while waiting for the algorithm to adjust to a higher ad spend.

Here are a few of ways to do that:

Pause brand awareness campaigns like video shopping
Scale back brand campaigns by reducing budget and or changing bids
Find brand keywords that are taking money in the other search campaigns

When a campaign isn’t limited by budget, we can often increase the spend without lowering ROAS by much at all.

But what if your account has maxed out its spend and reached its entire market/audience?

Use lower-spend outbound campaigns. These are campaigns like YouTube or Display that help increase your brand awareness and introduce your offer to a new audience.

Start running these campaigns with a lower budget and analyze how they affect your overall campaign performance.

You will sacrifice your ROAS with these new outbound campaigns. So it’s best to keep the ad spend low in the beginning.

As a result, your main campaign conversion driver should become more active.

You’ll be able to increase your outbound campaigns’ budget incrementally.

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